business

The vacant lot across the street from the Guthrie Theater is on its way to becoming the new headquarters site for two local nonprofits -- the American Academy of Neurology and Artspace Projects Inc.

Planners for the city of Minneapolis, which owns the land, selected the groups' proposal from three different pitches to develop and want to begin negotiations. The L-shaped lot wraps around the Riverfront Parking Ramp on S. 2nd Street.

Planners are making their recommendation to the City Council's community development committee Tuesday, with a full City Council vote scheduled for July 2.

Kristin Guild, manager of business development for the Minneapolis Community Planning and Economic Development Department, said she doesn't expect opposition.

"This proposal really balances the city's objectives of increasing residential and reinforcing commercial activity," Guild said. It was also the only plan that called for using the entire site, she said.

The other two proposals for the so-called Parcel E Liner site were from Minneapolis-based Sherman Associates, which proposed a residential-retail complex, and St. Louis Park-based JMW Development, which pitched a four-story office building.

The winning bid calls for a 53,000-square-foot, four-story headquarters office building along Chicago Avenue S. for the American Academy of Neurology, currently based in St. Paul. It also calls for Artspace Projects Inc., a major real estate developer for the arts, to build a four-story building along Washington Avenue S. with office and studio space and 36 affordable housing units for artists, plus a fifth-floor penthouse. Both will tap the city-owned Riverfront ramp for parking.

The American Academy of Neurology is expected to start construction next year, but it could take Artspace longer to break ground since it needs to arrange financing, Guild said.

Total project costs for the two buildings are estimated at $29.3 million, according to a copy of a planning report to be submitted June 22.

The city still has to negotiate selling the land to the parties, Guild said. The Academy has offered $425,000 for its section, and Artspace has offered $475,000 for its section. That works out to about $21.95 a square foot for the total site, which is just under an acre.

Guild called that "the initial foray into discussions of price." The city still needs to do an appraisal. Some nearby land in the Mill District has gone for $37 a square foot, she said.

In addition to housing more than 120 employees, the professional association holds hundreds of meetings at its headquarters every year, Guild said. Those people are expected to visit nearby restaurants and hotels as well as the Guthrie.

"We think they'll add some key daytime vitality," she said.

Catherine Rydell, executive director of the American Academy of Neurology, said the group's financing is in place.

"We're thrilled that this city sees the same vision that we do for our global headquarters," Rydell said.

Guild said that Artspace is nationally known but still doesn't have one of its projects in Minneapolis. The site across from the Guthrie would be its first in Minneapolis.

Jennifer Bjorhus • 612-673-4683